Colleges Putting Stock Picks in Students' Hands

GWU students specialize in certain sectors, such as technology, and push stocks to the class. Above, Bonnie Tanner gives a presentation to her classmates. (Photos By Sarah L. Voisin -- The Washington Post)

Even now, after graduating last month, Mira Spassova still tracks stocks she picked for a class. No wonder -- she and her George Washington University School of Business classmates were investing real money, and they cleaned up.

Lesson learned: You can make a whole lot of money in the stock market.

The Standard & Poor's 500-stock index returned about 15 percent for the year ending April 30, the first anniversary of the class. And the Ramsey Student Investment Fund, the $1 million in GWU's endowment managed by her class? More than 27 percent.

A growing number of schools use real money to teach investing. Professors swear students work harder and learn more, both from uplifts and heart-stopping drops, than they do in theory classes.

And with returns like these -- why not?

Advisers admit to sweating some lousy picks. At GWU, they know they've had good luck; they don't expect returns this spectacular every year. But that doesn't mean a lot of people wouldn't like to know: How are the students doing this?

At a recent class in Foggy Bottom, flat-screen Bloomberg monitors flickered with graphs and numbers and PowerPoint slides lighted one wall with "BUY" stamped over an image of an oil derrick. Just as in a meeting at an investment firm, with analysts defending their picks to the other researchers, students pushed stocks to their classmates.

The money came from local financier and university trustee W. Russell Ramsey and his wife, Norma, who donated $1 million last spring, with gains going to the endowment.

Not only are more schools creating funds, but the existing clubs and classes are growing.

The University of Maryland is starting an undergraduate-led fund to add to two successful ones at the business school. At the University of Virginia's Darden business school, trustees just added to funds now totaling $5 million, which earned more than a half-million dollars for the endowment over the past year.

At the University of Dayton, a dean initially set aside $25,000 for a fund that has ballooned, with good returns and a lot more money poured in since 1994, to more than $6 million. Dayton students keep beating their S&P benchmark, said David Sauer, director of the university's Davis Center for Portfolio Management -- and most money managers have trouble meeting it.

More than $40 million -- yes, four-zero -- at the University of Wisconsin system is managed by students.